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October 11, 2006

What the EU Costs Us.

Here's a little more information for you.

The bureaucratic costs to business of complying with European legislation could be up to €600bn a year - almost twice original estimates - the European Union's enterprise commissioner admitted on Monday.

Very roughly, that's 30% of the entire production of the 60 million people in the UK spread out across the population of the EU. It's thus something like the whole output of an entire 20 million of the world's most productive citizens* pissed away so that bureacrats can play with their paper clips.

Can we leave yet?

* Yes, yes, I know that UK citizens are not the world's most productive but on a global basis the difference between us and say the US pales into insignificance when compared with Africa and the like.

October 11, 2006 in European Union | Permalink


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Ah Tim! a polemnical piece worthy of the Daily Mail...

At least some of the regulation might be worth keeping.

Its also a myth that exit from the EU would lead to a complete cut in the UK's share of the 600bn Euro regulatory burden.

Currently EU business regulations supercede and replace UK ones, and the UK intends to remove their "goldplating" (stricter or additional rules) of EU regulations.

So even if we pulled out of the EU, we would need to replace EU regulations with UK originated ones for certain things. You could argue the toss over the reach of regulation, but some would still need to be retained.

Posted by: angry economist | Oct 11, 2006 12:26:10 PM

How curious, Tim. I have been having seemingly intractable problems with printing out the linked report here from the Financial Times as well as with other press reports about Commissioner Verheugen's views on the excessive powers of the bureaucracy in the EU Commission. It's starting to look like another of those remarkable coincidences.

I'm reminded of an online dialogue I was having about the Euro in 2000 with a banker who was hugely knowledgeable about international finance. It turned out that both of us were sceptical at that time about prospects for the single currency. Suddenly, a previously identified EU Commission official intervened in the dialogue to post a claim that google showed my name was linked with pornographic websites - which btw I don't happen to visit. I joke not. The experience showed then how Commission officials set about discrediting critics of EU policy to disrupt (informed) discussions.

I've resolved the printing problem by the simple device of cutting 'n' pasting the text of the articles for our discussion group on current affairs.

Posted by: Bob B | Oct 11, 2006 1:17:37 PM


Posted by: Richard North | Oct 11, 2006 1:57:50 PM

angry economist

"Its also a myth that exit from the EU would lead to a complete cut in the UK's share of the 600bn Euro regulatory burden"

Could you tell us the paltry sum that we may be saved on regulation by exit from the EU: E60 billion, E6billion or what? Or is the claim that there could be any significant saving a myth peddled by eurosceptics to mislead a gullible public?

Posted by: Umbongo | Oct 11, 2006 2:57:34 PM

umbongo - it really depends on what you want regulation for. The anti-regulation brigade use the big numbers to scare people.

But the regulation burden includes things like competition law; environmental regulation; health and safety regulation; hazardous subtances etc etc.

The EU regulations aim to harmonize certain regulations across Europe.

So its not the case that if the UK withdrew from Europe we'd drop billions in business compliance costs. Its likely UK would still want hazardous substances regulation etc.

There'd be additional costs from EU withdrawal. There'd be a transitionary cost of inventing new UK legislation and regulations to replace the EU ones we withdraw from.

Ultimately any figure for savings depends on where you set out the limits of regulation on business activites; and also a calculation of transitionary costs.

Posted by: angry economist | Oct 11, 2006 4:34:00 PM

The (usually implicit) assumption made by those advocating Britain's withdrawal from the EU is that the EU minus Britain would thereafter remain as a "good" player adhering to WTO rules.

However, there is little to underpin faith in any such assumption when the three largest Eurozone country governments have each breached their own mutual Stability and Growth Pact of 1997 which was intended precisely to maintain the good reputation of the Euro as an international currency.

Besides, the EU Commission really is a disgrace. For eleven years running the European Court of Auditors has declined to endorse EU Commission accounts:

"Sir John Bourn, the head of the [UK's] National Audit Office, reported to Parliament today [29 March 2006] on the financial management of the European Union. His report summarises the main findings of the European Court of Auditors’ report, published in November 2005, on the European Council’s accounts for 2004. Sir John also highlighted other key developments in financial management of the European Union, including the developments in this area during the United Kingdom’s Presidency of the European Council in the latter half of 2005.

"Note for editors: The European Court of Auditors is the external auditor of the European Community. The Court reports annually on its findings on the management of Community funds. The Court also provides an annual Statement of Assurance on the reliability of the Community’s accounts and the legality and regularity of the underlying transactions. The Court is made up of one Member from each Member State, supported by some 750 staff. This is the 11th time that the Comptroller and Auditor General has reported to Parliament on the Court’s Annual Report and Statement of Assurance."

Readers will likely recall that all EU Commissioners resigned in March 1999 after a damning report by a panel of experts in December 1998 exposing fraud, corruption and mismanagement at senior levels:

The mass resignations of all the Commissioners in 1999 was meant to provide the basis for a fresh start but it wasn't long before another scandal of fraud and corruption surfaced in the Commission in the summer of 2003:

Not much has been heard lately about the clearup and aftermath of the great Eurostat fraud scandal.

FWIW I believe Britain needs to remain an active member of the EU as the best option for protecting British interests. The simple fact is that whether Britain is in or out, EU rules and regulations will continue to affect Britain's trade with Europe.

Posted by: Bob B | Oct 11, 2006 7:25:22 PM

angry economist

Thanks for that. I would observe that if we did leave the EU we could pick and choose which regulations we would keep, make or enforce. I am reluctant to believe that wherever we drew the line we could not make substantial savings (even if we only dropped this regulation http://www.btinternet.com/~brentours/EU42.htm )

Posted by: Umbongo | Oct 11, 2006 7:33:52 PM